The Monday Roundup: what we are watching this week | August 14th

By Puja Sharma

The Monday Roundup sets the scene for the week’s biggest news stories, industry deals, and upcoming events. For Prime subscribers only.

FinTech landscape in turmoil

FinTech startups in Latin America are experiencing a seismic shift as economic challenges send shockwaves throughout the region. One standout player has emerged amidst all this upheaval: Nu Holdings Ltd., which boasts over 85 million customers and is one of the largest financial institutions in Latin America.

As a result of early investors such as Warren Buffett’s Berkshire Hathaway Inc., the stock of the online bank and credit-card issuer has soared approximately 90% this year, boosting the company’s market value to an astonishing 200 times its reported profitability.

Financial Conduct Authority (FCA) has requested information on account closures from the country’s largest banks and building societies.

The company must provide the watchdog with details on the number of customers who were terminated, suspended, or denied service, the reasons for each decision, as well as how many complaints were received. A regulator will also ask if there have been any terminations based on “political or other views”. NatWest Group chief executive Alison Rose stepped down last month as a result of a highly publicised row with Nigel Farage.

Farage produced evidence indicating that his account with the group’s private banking business Coutts had been closed. He claims he was “de-banked” because his political views were at odds with the bank’s core values, while the bank says it was a commercial decision.

We’re asking about both personal and business customers, including pawn brokers, charities and political parties,” the FCA said, emphasising that the request is to better understand the cause and scale of account closures. The FCA intends to engage the largest payment firms in its investigation, and has confirmed that it will provide an initial assessment “by mid-September” and will share its analysis with UK Chancellor Jeremy Hunt.

Digital currencies

Payments giant PayPal has launched a US dollar-denominated stablecoin, PayPal USD, to transform payments in web3 and digitally native environments.

PayPal USD is 100% backed by US dollar deposits, short-term US Treasuries and similar cash equivalents and can be redeemed 1:1 for US dollars and is issued by Paxos Trust Company.

“The shift toward digital currencies requires a stable instrument that is digitally native and easily connected to fiat currency like the US dollar,” said Dan Schulman, president and CEO of PayPal. “Our commitment to responsible innovation and compliance, and our track record delivering new experiences to our customers, provides the foundation necessary to contribute to the growth of digital payments through PayPal USD.”

National Payments Corporation of India (NPCI) has launched the 3rd edition of the UPI Safety Awareness Campaign, “UPI Chalega”.

The campaign aims to promote UPI as an easy, safe, and instant mode of payment. It also educates users about various features such as UPI LITE, which enables swift low-value transactions; UPI AUTOPAY, which allows secure and convenient recurring payments using any UPI application; and UPI Interoperability, which facilitates seamless money transfers between all UPI-enabled applications.

UPI has revolutionized digital payments, witnessing increased transaction value and volume. The campaign was launched in 2020 under the Financial Literacy Advisory Committee (FLAC) guidance. UPI Chalega Campaign 1.0 and 2.0 played a crucial role in expanding UPI’s outreach, educating users about its safety, and enhancing its ease of use for various transactions, making it the preferred payment choice.

Praveena Rai, Chief Operating Officer, NPCI said, “We at NPCI are thrilled to unveil the third edition of our popular ‘UPI Chalega’ campaign. This dedicated initiative, developed in collaboration with key stakeholders in the payment ecosystem, aims to educate users about the seamless adoption of digital payments using UPI. Through this campaign, we strive to instil confidence in users, empowering them to make secure and hassle-free transactions with UPI and experience the true potential of this transformative payment platform.”

UPI Chalega 3.0 aims to drive UPI adoption and safe usage through engaging initiatives. The campaign aims to boost UPI’s brand awareness, amplify understanding of its features, and encourage wider adoption among new users.

What is the buzz

Changing regulatory environment prompts Revolut to halt crypto services in the US. Revolut suspends crypto operations in the US. Revolut has announced that from 2 September, US customers will no longer be able to place orders for crypto with the bank, and access will be fully disabled on 3 October.

In an interview with FinTech Futures, a Revolut spokesperson attributed the move to “the evolving regulatory environment” in the country and “uncertainties in the cryptocurrency market”.

Its announcement is indicative of the increasingly strenuous relationship between US regulators and cryptocurrency, coming mere months after the Securities and Exchange Commission (SEC) cracked down on industry heavyweights Coinbase and Binance.